Business Directories

Western expats in UAE ‘save less’

Dubai, September 25, 2013

UAE-based Western expatriates are seen to be less prudent than those in Singapore and Hong Kong in financial planning, according to a study.

The first Standard Life Western Expat Wealth Study considered the saving, spending and investment behaviour of approximately 400 Western expats across the UAE, Singapore and Hong Kong.

About 97 per cent of those in the UAE spent some of their disposable income on luxurious lifestyle choices, 31 per cent sought professional financial advice and only 9 per cent invested in equity.

In comparison, spending on luxury lifestyle choices among respondents was much lower in Singapore (51 per cent) and Hong Kong (47 per cent), while there was a greater number seeking professional financial advice in Singapore (49 per cent) and Hong Kong (53 per cent).

The study also revealed that preference towards equity investments was significantly higher in Singapore and Hong Kong, with 43 per cent and 71 per cent respectively. However, about 70 per cent of UAE respondents invested in mutual funds, as compared to 67 per cent in Singapore and 56 per cent in Hong Kong.

Chris Divito, CEO of Standard Life DIFC Branch, said: “Saving and spending behaviour can be varied with locations and demographics, but it is clear that most become expatriates due to financial factors. They move to high earning, tax friendly cities with the intention to save and secure their financial future.”

About 66 per cent of respondents in Singapore and 56 per cent in Hong Kong preferred to invest in gold, as opposed to only 15 per cent in the UAE. While, property investments were most popular among Singapore respondents, followed by Hong Kong and the UAE.

Divito added: “It is seen that investors in more developed capital markets like Hong Kong and Singapore had a higher allocation for equities than upcoming markets like the UAE. We are investing in this research to understand our Western expat customers better, so that we can offer them the right financial solutions across different locations and jurisdictions.”

The study also revealed that about 84 per cent of respondents in Hong Kong believe they will have sufficient income post retirement, followed by the 76 per cent in the UAE and 47 per cent in Singapore. It was also found that only 35 per cent of UAE respondents plan to return home after retirement, in comparison to 90 per cent in Singapore.

“Many of the responses reflect demographics and market attributes. The belief about sufficient retirement planning among UAE respondents is quite interesting as this group was found to have the least inclination for savings. There could be a mismatch between aspirations and realities or income and expenditure. This is increasingly evident as we can see that fewer UAE respondents rely on professional financial advice,” Divito added. - TradeArabia News Service